NARAYANJI GAJAKWALE PVT. LTD.,,JAIPUR vs. JCIT, JAIPUR

- आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh HkkxpUn] ys[kk lnL; ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 813 & 1005/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 & 2010-11 cuke M/s. Narayanji Gajakwale (P) Ltd. The JCIT Vs. 855, Aakron Ka Rasta, Central Range Kishanpole Bazar, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCN 7259 A vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by: Smt. Poonam Rai, DCIT - DR fu/kZkfjrh dh vksj ls@Assessee by: Shri S.K. Gogra, CA and Shri S.S. Gogra, Advocate lquokbZ dh rkjh[k@ Date of Hearing : 12/01/2017 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 16/01/2017 vkns'k@ ORDER PER BHAGCHAND, AM Both these appeals have been filed by the assessee against common order of the ld. CIT(A)- 4, Jaipur dated 03-06-2016 for the assessment years 2007-08 and 2010-11 respectively regarding imposing the penalty of Rs. 68,000 & Rs. 60,000/- u/s 271D of the Act respectively.

2 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur 2.1 During the course of hearing, ld. AR of the assessee prayed for

condonation of delay in assessee’s ITA No. 1005/JP/2016 for the

assessment year 2010-11 as under:-

‘’1. That the ld. CIT(A) Jaipur dismissed the appeals for the assessment years 2007-08 ad 2010-11 vide his order dated 3-06-2016. The appellant under the bona fide impression submitted single appeal before the Hon'ble ITAT against the order of the CIT which was passed by him as single order. The appellant in form no. 36 in column no. 3 & 3B mentioned the reference of appeal for both the years. Subsequently, it was realized by the appellant that the two appeals should have been filed before the Hon'ble ITAT in respect of above both the years. Vide application dated 11- 11-2016 the appellant requested to the Hon'ble ITAT to treat the appeal filed on 12-09-2016 for the A.Y. 2007-08. Since the mistake committed by the noticed voluntarily, therefore, the separate appeal in respect of the assessment year 2010- 11 is being submitted. The delay of 63 delays in filing of the appeal may please be condoned.

It is therefore, humbly prayed that the delay occurred due to bonafide and reasonable cause which may kindly be condoned for imparting justice to the assessee.’’

3 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur 2.2 The ld. DR objected to the condonation application of the

assessee for late filing of the appeal.

2.3 I have heard the rival contentions and perused the materials

available on record. Keeping in view of the facts and circumstances of the

assessee, the condonation application for late filing of the appeal of the

assessee is allowed in view of the judgment of ‘’Hon'ble Apex Court in

the case of Collector, Land Acquisition vs. Mst. Katiji and Others, 167

ITR 471 wherein the Hon'ble Court has observed as under:-

‘’The Legislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963, in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression " sufficient cause " in section 5 is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice--that being the life-purpose of the existence of the institution of courts. A justifiably liberal approach has to be adopted on principle. ‘’

Thus the assessee's application for condonation of delay is allowed.

3.1 Apropos assessee's solitary ground for imposition of penalty u/s

271D of the Act in both the appeals, the facts as emerges from the order

of the ld. CIT(A) is as under:-

‘’4. I have duly considered assessee's submission and also carefully gone through assessment order and penalty orders passed u/s 271D of the I.T. Act. I have also taken a note of factual matrix of the case as well as applicable case laws relied upon.

4 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur On perusal of the submission for the A.Y. 2007-08 and 2010-11, it is seen that assessee during the F.Y. 2006-07 and 2009-10 under appeal held received a sum of Rs. 68,000/- and Rs. 60,000/- in cash. In this regard, assessee as contended that the transactions pertaining to sum of Rs. 68,000/- and Rs. 60,000/- is in the nature of current account on urgent basis to meet business liability. Explanation given in this regard does not seem to be bonafide as assessee failed to explain exact nature of ‘’urgent business requirement’’. It is submitted that a/c maintained by the assessee is a composite a/c which contain details of entries in cheque (especially for salary transaction and loan transactions) and cash transactions but even after repeated request, no such ledger a/c or cash book of company. Therefore, in view of facts and circumstances of the case which assessee has failed to justify its contention. Penalty levied of Rs. 68,000/-and Rs. 60,000/- u/s 271D of the Act is hereby justified. Assessee's both appeals are failing in Gr. No. 1. 5. In the result, the appeal in ITA No. 286/12-13 pertaining to penalty order passed u/s 271D of the Act stands dismissed for A.Y. 2007-08 6. In the result, the appeal in ITA No. 369/12-13 pertaining to penalty order passed u/s 271D of the Act stands dismissed for A.Y. 2010-11.’’

3.2 During the course of hearing, the ld. AR of the submitted that the

assessee company had received the following funds/ amounts from its

director on account of current account transactions in the assessment

years 2007-08 and 2010-11.

A.Y. 2007-08 A.Y. 2010-11 S.N. Name of Director Date Amount Name of Director Date Amount taken taken 1. Dinesh Meena 5-04-16 20,000 Dinesh Meena 3-04-09 20,000 2. Dinesh Meena 28-12-06 14,000 Ramkaran Meena 2-04-09 20,000

5 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur 3. Jitendra Meena 5-04-06 20,000 Ramswaroop 1-04-09 20,000 Meena 4. Jitendra Meena 28-04-05 14,000 - - - Total 68,000 Total 60,000

The ld. AR of the assessee further contended that the funds taken by the

assessee from its Director in its regular course of business from current

account maintained by the assessee company in its books of account.

These funds are received to meet urgent needs of company time to time.

The ld. AR further submitted that transactions are in between a closely

held company and its directors implying that one individual managing the

affairs of the two concerns and the transactions do not partake the nature

of deposit. The entire transaction is undertaken with bona fide intention.

Shri Ramswaroop Meena also filed a copy of affidavit dated 21-11-2011

that one person was managing the entire business affairs of entire group.

There is a joint family consisting of all four brothers i.e. Ramswaroop

Meena, Ramkaran Meena, Rajendra Meena, Jintendra Meena and their

families. The ld. AR further submitted that the return income is accepted.

The confirmation of accounts were submitted to the lower authorities but

the lower authorities confirmed the penalty u/s 271D on the assessee.

The ld. AR of the assessee relied on following case laws to this effect.

6 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur covered by the expression ‘’any other person’’ occurring in Section 269SS of the Act. Further held that ‘’mere technical breach of provisions, while transactions were held to be genuine do not attract provisions of Section 269SS, therefore, where one of the directors of assessee company brought funds from his personal account whenever assessee was in requirement of funds whether transactions between assessee and director of assessee do not fall within mischief sought to be remedied by the Section as there is no case against assessee that these transactions had anything to do with evasion of tax or concealment of income.’’

3.3 During the course of hearing, the ld. DR relied on the orders of

lower authorities.

3.4 I have heard the rival contentions and perused the materials

available on record. It is noted from the available records that the assessee

7 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur had received funds in cash from its directors amounting to Rs. 68,000/-

for the assessment year 2007-08 and Rs. 60,000/- for the assessment year

2010-11 respectively for meeting out the urgent business needs of the

assessee company for which the assessee had submitted the confirmation

of accounts to the lower authorities. It is noted that the return of income

filed by the assessee is accepted and there was no case against the

assessee that these transactions had anything to do with evasion of tax or

concealment of income. It may be noted that Section 271D read with

Section 269SS was introduced by the legislature to discourage the

menace of black money. Since these transactions are genuine, this

element of black money is totally ruled out. It is further noted that on

similar type of issue the ITAT Coordinate Bench in the case of Smt.

Kusum Dhamani vs. Addl. CIT vide its order dated 13-06-2014 in ITA

No. 847/JP/2011 for the assessment year 2006-07 had deleted the penalty

u/s 271D of the Act by observing as under:-

‘‘4.0 We have heard the rival submissions and perused the relevant material available on record. From the record there is no shred of doubt about the genuineness of the transactions and their disclosure in the books of account and returns of both the assessee who happen to be husband and wife, carrying on the business as sister concerns. Section 271D read with Section 269SS was introduced by the legislature to discourage the menace of black money. Since these transactions are genuine, this element of black money is totally ruled out. The assessee has given an explanation in our view is not unreasonable and is based on business exigencies also for payments to labourers and lenders. Under these circumstances, we are of the view that the transactions being genuine and the assessee having offered

8 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur reasonable explanation justifying these cash transactions, the impugned penalty u/s 271D is not leviable. Our view is fortified by the judgement of Hon'ble Jurisdictional High Court in the case of CIT vs. Raj Kumar Sharma (supra) and the judgement of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Saini Medical Store (supra) which is followed by Hon'ble P & H High Court in the case of CIT vs. Sunil Kumar Goel (supra). Thus in view of the facts and circumstances of the case and the decisions relied on above, the penalty is deleted.

Respectfully following the decision of ITAT Coordinate Bench in the

case of Smt. Kusum Dhamani vs. Addl. CIT (supra) and also in view of

the following case laws as relied upon by the ld. AR of the assessee

namely :-

I direct to delete the penalty of Rs. 68,000/- and 60,000/- respectively

u/s 271D of the Act sustained by the ld. CIT(A) in assessee's case for

both the assessment years (supra). Thus the appeals of the assessee are

allowed

9 ITA No. 813/JP/2016 M/s. Naryanji Gajakwale (P) Ltd. vs. JCIT, Central Range, Jaipur

4.0 In the result, the appeals of the assessee are allowed. Order pronounced in the open court on 16 /01/2017 Sd/- ¼HkkxpUn½ (Bhagchand) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 16 /01/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- M/s. Narayanji Gajakwale (P) Ltd. Jaipur 1. 2. izR;FkhZ@ The Respondent- The JCIT, Central Range, Jaipur vk;dj vk;qDr¼vihy½@ CIT(A). 3. 4. vk;dj vk;qDr@ CIT, विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 813/JP/2016) vkns'kkuqlkj@ By order,

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